Utah Ranked Lowest State in Workers' Comp Costs

For the third year in a row, Utah is ranked as the lowest state in\r\nthe nation for workers' compensation costs in the manufacturing\r\nindustry, according to a study.

For the third year in a row, Utah is ranked as the lowest state in the nation for workers'' compensation costs in the manufacturing industry, according to a study.

Workers Compensation Fund (WCF), Utah''s largest provider of workers'' compensation insurance, said Utah companies'' efforts to promote a safe workplace have decreased premiums locally.

"A company that is devoted to a safe workplace has lower premiums, fewer claims and higher employee morale," said Lane Summerhays, WCF and CEO. "Because many Utah companies have created a safe work culture, overall premiums in Utah have decreased more than $100 million over the past five years."

Utah''s steady decline in costs in recent years mirrors a national trend, where the average costs nationally have decreased for the sixth year in a row.

According to a study, the average workers'' compensation cost nationwide decreased more than 8 percent from 1999 to 2000.

At $3.21 per $100 of payroll, the countrywide average for 2000 is the lowest it has been since the late 1980s.

"Companies need to recognize that they greatly influence workers'' compensation costs," said Summerhays. "Companies that implement safety programs, enforce drug and alcohol policies and proactively work with injured employees until they return to the jobs have seen amazing results in reduced workers'' compensation costs."

For example, one Salt Lake-based companies, Okland Construction Co., has seen reductions in its workers'' compensation costs by implementing safety programs.

Over the past five years, Okland''s safety department has revolutionized what was already considered a safe company.

The companies experience modification (e-mod) factor has decreased from 0.88 in 1995 to 0.43 in 1999.

With a national construction industry average e-mod of 1.0, Okland''s current e-mod is one of the lowest nationwide.

"The company is committed to a safe work environment," said Jay McChesney, Okland''s safety director. "From top management to the on-site worker, we all want to work in a safe environment. We can''t grow or be competitive if we have accidents."

Along with training sessions, project manager meetings and a strict drug and alcohol policy, Okland sponsors incentive programs for both workers and project managers, such as its "Safe Job of the Month" program and awards to those who work 500 hours without an injury.

Because of Okland''s proactive approach to safety, the company now boasts of working more than 1.8 million hours over nearly two years without a lost-time accident.

"Our return-to-work program is successful because we put our injured employees on light duty, where they work full time and receive full pay," said McChesney. "We''ve received letters from people on light duty thanking us for helping them to continue providing for their families. They rely on working 40 hours to make ends meet, and we rely on their light duty to remain productive. It''s a win-win situation."

Okland''s efforts have paid off. The company''s workers'' compensation premium as a percent of payroll is a mere 0.56 percent, far below the construction industry''s national average of 8.43 percent.

While nationally, construction companies average $8,629 per claim, Okland averages $785, which is 91 percent lower than the national average.

"We want our employees to return to their families each night in the same condition as when they left in the morning," said McChesney. "The worst thing would be to tell someone that their spouse, parent or child was injured in an accident. We do everything we can to make sure that doesn''t happen."

Okland was recognized last may by WCF as being among Utah''s safest companies.

Summerhays hopes more companies will take proactive steps to make safety a priority in their workplaces.

"Safety is no accident -- each company makes a choice to have either a safe or unsafe work culture," said Summerhays. "Workers at a company with a safe workplace know their employers care about their well-being. Safe companies are then rewarded with lower workers'' compensation premiums."

by Virginia Sutcliffe

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